Reducing Stripe & Shopify Payment Processing Fees

Last updated: May 24th, 2019.

Payment processing isn’t exactly the sexiest part of growing a successful eCommerce business. But as you scale your eCommerce offerings, every percentage point counts toward your bottom line. In this guide, we cover various proven methods to reduce credit card processing fees for both Stripe and Shopify - along with real world examples.

How To Reduce Stripe Payment Processing Fees

Stripe fees are a fact of life for most online sellers. But they can be negotiated down more often (and with greater results) than you’d think. We've done it on our own businesses and will show you how.

For starters, Stripe was recently valued at $20 billion dollars. Here we show you how to put some of that money back in your pocket with real-life examples of reduced Stripe fees that were negotiated by real customers.

Stripe founders Stripe's founders have created a $20 billion company

In addition to these real life examples, it's essential to get a bit of background on how the payment processing world works. This information could prove valuable in your negotiations, and possibly even change a few things about how you do business.

About Stripe Payment Processing & Fees

Stripe is a pure payment processor that integrates with Shopify and pretty much any other online store you can build. They work with all the major financial institutions.

Stripe offers two official pricing plans:

  • Pay As You Go: 2.9% of each transaction plus a $.30 surcharge
  • Enterprise: Negotiable rates, volume discounts, account management, and dedicated support

There’s room for negotiation with both options, but the Enterprise model is designed to accommodate businesses with large volume.

Your business needs to generate at least $80,000 per month consistently to get a seat at the negotiating table

Actual Numbers From Real Businesses

Here's the thing.

Even if you do hit $80k per month, you are probably not going to get a discount without asking for it. And even then, it can be tricky.

In a 2017 case study VP of Operations Tyler Newkirk attempted to negotiate his processing fees with Stripe. He was denied lower fees because his revenue did not exceed $80,000 for three consecutive months. It did match or exceed $80,000 for the first and third months, but a significant drop in the second month took him out of the running.

In my experience at Social Print Studio, we were able to get a few different levels of discount negotiated once we hit various milestones over the years. We had to exchange emails with several people at Stripe to achieve these, and sometimes we were denied. But here's a quick overview of what we were able to get:

  • At around $1m per year - 2.5% + $0.30
  • At around $2m per year - 1.9% + $0.30
  • At around $3m per year - 1.8% + $0.30

There's no saying you'll be able to get these rates though, because there are many other factors at play that Stripe will be considering when reviewing your account. But you have to try! After all, the difference between what we were originally offered and what we negotiated at $3m yearly revenue translated into a savings of $33,000 per year.

Consider the case of Buffer who publish all their financials. It seems they are making over $10m per year and they are still getting the rate of 2.2% + $0.30.

So even if you are getting higher revenues you might not be eligible for the lower rates. Let's explore why.

Potential Issues & Reasons You Might Not Get A Lower Rate

First, you need to know about Interchange Rates & Fees.

Stripe doesn't take all that 2.9%. They still have costs themselves - they pay a cut of each transaction to the card issuers & banks. These are called Interchange Rates.

You'll never be able to get lower Stripe rates than their Interchange Rates + some markup.

These fees are charged by the card issuer, and then split between the banks, card marketing partners like airlines and the networks themselves (Visa, MC, Amex). To figure out the rates, there are complicated tables you can try to understand, but here's a simplistic overview:

Visa & Mastercard cards usually cost somewhere between 0.7% to 2.25% and $0.10 of every transaction.

This can vary a lot based on factors like debit cards vs credit cards, or was the card number typed in (higher fee), or was it swiped (lower fee), and other variables. Here's a short extract from the Mastercard fee tables:

Mastercard Interchange Rates

Interchange Rate tables from Mastercard.

But American Express fees are much higher - AmEx Cards typically cost over 3% + $0.15 per transaction.

Given these high costs for Stripe, the number of American Express transactions you process in a given month can hurt their profitability.

The AmEx processing fee is already significantly higher than the fee Stripe charges you. Essentially, they lose money on every one of these transactions.

If your business relies heavily on AmEx transactions, this is unattractive to Stripe and makes you an unlikely candidate for lower fees. However, if this percentage is low, or you go as far as banning AmEx as a form of tender, you could win their favor.

Take Buffer for example. Since they are selling to businesses, and corporate credit cards are often Amex, this may factor into their higher rates with Stripe. More B2B type services may not be able to avoid this situation.

Another factor against you could be your chargeback rate. Chargebacks are when a customer believes their card was charged in error, and call their bank to reverse the charge, usually in instances of fraud. You can see how many you have in your Stripe Dashboard under Disputes.

Stripe Disputes Screen

Subscription billing companies often have this issue. Because people forget about the ongoing charges on their cards, they then claim they never agreed to them, and file a chargeback with the bank.

This happens especially if you make it difficult to cancel a subscription plan.

Higher chargeback rates lead to higher payment processor costs, leading them to refuse to lower your rates.

Chargebacks also are more common if your items are low quality, your customer support is not prompt with refunds when things go wrong, or even simply the name you've chosen for the bank statement charge seems dodgy. Make sure the name on the statement reflects the name of your website!

One more big reason to try to prevent chargebacks: if you lose the claim, you incur another $15 fee from Stripe.

Stripe Disputes Fee

These can add up over time and really hurt your business in both fees & inability to secure lower rates.

The Bottom Line

Even if you think you’re eligible for a volume discount, the power is still in Stripe’s hands. Going to them to ask for a reduction, the scenario would play out as follows: they’ll calculate your actual rate based on your current volume and hopefully offer you something lower. Shopping around won’t help here.

The negotiation with Stripe isn’t about whittling down the price to something you want; it’s about meeting a threshold to ask for a pricing break. And any break they give you is usually cheaper than you could get as a small merchant trying to do this on your own.

It will most certainly be cheaper than dealing with merchant services divisions directly.

Overall from my experience, and the "anecdata" I have seen, Stripe will do fair by you as long as you're making money for them!

Good luck with your negotiations and I hope the data and information here will help you out.

Feel free to contact us at Order Metrics if you need advice on any of this, I'd be happy to take a look.

Understanding and Reducing Shopify Fees

Shopify makes most of their money by charging a percentage of sales that go through their system, either via their Shopify Payments (powered by Stripe), or by levying a surcharge on top of Paypal or 70 other supported alternative payment gateways.

Shopify’s Merchant Solutions revenue was $149 million for Q3 of 2018.

Shopify Financial Results

An important thing to know before you get too deep into this guide is you can't negotiate with Shopify for lower credit card processing fees until you are on the Shopify Plus plans. Even then you will need significant sales volume.

If you are on one of the lower plans - there is good news! There are still ways to reduce your transaction costs, you just need to do the math to optimize your plan choices, understand the alternatives, and avoid some common pitfalls.

Understanding Shopify's Fees

Before you negotiate with Shopify, take some time to understand the company’s payment processing structure.

The fees you’ll pay will vary based on your Shopify membership. For example, in the USA, with the Basic Shopify package ($29/month), you’ll pay a 2.9% fee per transaction + $0.30

Plan Subscription Cost Processing Fee External Gateway Fee
Shopify Basic $29/month 2.9% + $0.30 2.0%
Shopify Mid Tier $79/month 2.6% + $0.30 1.0%
Shopify Advanced $299/month 2.4% + $0.30 0.5%

Ignoring the External Gateway fee for now, you can see the cheapest monthly plan is Basic Shopify - that's probably where you should start, even though the fee difference is only $50 per month.

In fact, you will need to be selling $16,667 per month for the Mid-Tier Plan to be better value than the Basic Shopify plan. That's the exact level of monthly sales you need for the value of the 0.3% lower transaction processing rate to be greater than the $50 extra monthly fee for Shopify.

So if you're just starting out, we don’t recommend upgrading to Shopify Basic until you have $16,667 sales per month.

Using the same math, it only makes sense to make the leap to Shopify Advance when your monthly sales exceed $110,000.

At this level of sales you are paying 2.6% + $0.30. For comparison, Stripe would likely offer you 2.5% + $0.30 (but if you used your own Stripe checkout you'd pay Shopify the additional 1% on top anyway).

Still, you won't be able to negotiate these rates with Shopify until you are on Shopify Plus.

Understand Shopify Payments with Paypal

If you accept Paypal on your Shopify store (or really any other 3rd party payment provider) you will be charged the additional external payment gateway fee instead of the Shopify Payments fee.

You only get charged this for orders where the customer checks out with Paypal - they won't double charge you directly. But this will be extra on top of whatever you are paying Paypal, which amounts to the same financial impact.

Paypal's processing fees start at 2.9% + 0.30c.

So if you are on the entry level Paypal pricing and the Basic Shopify plan - you will be paying 2.0% (to Shopify) PLUS 2.9% + 0.30c (to Paypal), for every transaction through Paypal.

Clearly this doesn't make a lot of sense, the only reason you should do this is if Shopify Payments doesn't work for you for edge-case reasons (for example, Shopify Payments won't allow certain classes of goods like some "cosmoceuticals" and e-cigs. They deem them high risk, so we see those stores selling using Paypal + Shopify).

Once you are on the Shopify or Shopify Advanced plans, you will be only paying 1% or 0.5% additionally for customers checking out using Paypal. At this rate it could make more sense to offer Paypal in addition to Shopify Payments - you need to balance the benefit of giving customers the choice of using Paypal with the additional cost.

Negotiating Shopify Plus fees

Shopify Plus is the first account level where you have Shopify's ear. These plans start at $2000 a month but the details are negotiable, especially if you are a big seller.

Once you are in Shopify Plus - your rate starts at 2.15% and $0.30 per transaction for payments.

You can negotiate this down based on your volume.

In order to get the best deal, remember these things when you go to negotiate.

  • The bigger the plan, the more negotiating power you have. If you’re already putting more money in their pockets, they’ll be more apt to work with you. Moving serious volume and paying Shopify over $3k per month in fees? You should be able to get a discount.
  • Maintain a good history with Shopify. Deliver great service to your customers and avoid delinquent payments. Prove that you’re trustworthy with a sterling record and they will want to help you out.

Common discount for Shopify Plus

We have heard stories of stores getting just 1.6% + $0.30. But the most common discount I have heard for mid-sized businesses is 2% + $0.30. There's often an additional charge for Amex cards.

It might help to shop around the other providers directly. If Shopify is only charging you a 0.15% third party payment gateway fee, and you can get 1.6% + $0.30 from Stripe (see our article on Negotiating with Stripe), then you are only looking at 1.75% + $0.30 even with Shopify's fee. You should be able to get them to match that without the trouble of setting up a Stripe plan yourself.

Again, this is only a helpful tactic if you’re moving big units and pulling in significant revenue consistently. If business is slow or it fluctuates often, you won’t have negotiation room.


If you are not a large seller, the best way to reduce your Shopify fees is by being on the correct plan for your volume & accepting Shopify Payments instead of Paypal. There's not much you can do beyond that.

If you are a Shopify Plus customer, remember to keep asking for reductions in your payment processing rates. It's unlikely they will give them to you without you being persistent and knowing what is available.

We hope this guide has shown you that it's possible to save 0.15% - 0.5% on Shopify Plus transaction fees, other stores are getting these deals. You just need to make your case.

About This Guide

The Order Metrics Profit Guide is designed to help you unlock the most profit for your e-commerce business.

This was written by George Sylvain, co-founder of Social Print Studio, a successful e-commerce store & app with over half a million customers.

Additional help was provided by Hank Kronick, founder of Order Metrics and data analysis specialist.

We've got a combined 16 years of e-commerce experience and have personally used every technique described in this guide and seen the results in practice.

This is not intended to be nonsense content marketing like you find on other company blogs.

These are real, tested techniques could help you grow your business and put some cash back in your pocket so you can invest in things that matter to you.

Check out the other articles we have written back at our profit guide index.

Want to find even more ways to improve your bottom line?

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